What Will Be the Amount in an RRSP After 25

question 59

Short Answer

What will be the amount in an RRSP after 25 years if contributions of $3,000 are made at each year-end for the first seven years and month-end contributions of $500 are made for the subsequent 18 years? Assume that the plan earns 8% compounded quarterly for the first 12 years and 7% compounded semi-annually for the next subsequent years.

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Definitions:

Physical Mechanisms

Processes or functions within a physical system that bring about a particular outcome or effect.

Empirical Reasoning

That process of thinking that proceeds from premises describing interpersonally verifiable experiences in order to support or to disconfirm hypotheses, which, in turn, are intended to explain and predict phenomena. Empirical reasoning is fundamentally inductive, self-corrective, and open to scrutiny and independent verification by the entire scientific community.

Instruments

Tools or devices designed for a specific purpose, especially used for scientific work, measurements, or music.

Causal Relationships

Connections between two events where one is understood to be the reason the other happens; cause and effect relationship.